News: NACM News

Credit Managers’ Index Hits a Speed Bump

Monday, October 30, 2017  
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Following gains in August and September, The Credit Managers’ Index declined slightly in October. Data from the National Association of Credit Management (NACM) shows the overall index dropping from its high point for the year, 56.5, to 55.5.

“The storms altered a lot of economic patterns,” said NACM Economist Chris Kuehl, Ph.D. “That has been seen in everything from volatile job numbers, changes in the rate of housing starts and even internal migration patterns for skilled workers. There are already signs of shifts as reconstruction gets thoroughly underway.”

Despite the overall decline, the index of favorable factors continued to improve, inching up from 63.5 to 63.8. The unfavorable categories declined from 51.8 to 50.

The favorable factor subcategories all remain in the 60s. Sales declined slightly from 67.3 to 66.8. New credit applications bounced back from last month’s drop, increasing from 60.5 to 62.8, signaling a greater demand for credit. The dollar collections category eased up again this month from 60 to 60.2. Amount of credit extended declined, but only slightly, moving from 66.3 to 65.5.

In the unfavorable subcategories, the overall reading remains out of the sub-50 contraction territory, but all categories declined. Rejections of credit applications slipped from 52.5 to 51.8. Accounts placed for collection returned to contraction territory, dropping from 50.3 to 49.5. The disputes reading took a significant hit, moving from 51.7 to 47.6. Dollar amount beyond terms also dropped, moving from 50.4 to 47.3. The dollar amount of customer deductions fell from 49.8 to 48.7. The filings for bankruptcies category remains well in contraction territory but still declined from 56.2 to 55.3.

“The bad news is that readings for the unfavorable factors were nearly all in expansion territory last month with only one reading in the 40s,” said Kuehl. “This month the situation is reversed, with only two categories in the expansion zone, and both of these also saw some decline from the month before.”

View the complete report and analysis from NACM.

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